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It’s All in Marshall: The Impact of External Economies on Regional Dynamics

  • David B. Audretsch
  • Oliver Falck
  • Stephan Heblich

Marshall's student Pigou noted: “It’s all in Marshall.” From a static point of view, this seems rather bold in a constantly changing world. However, this statement becomes more plausible in a dynamic context, where principles are subject to change. Indeed, over time, Marshall's concept of external economies gained fresh perspective as new concepts of regional characteristics and agglomeration evolved. This paper focuses on the impact of region and industry on dynamics and growth, distinguishing between industrial districts, industrial agglomerations and urban agglomerations. Based on these three types, we use a comprehensive large dataset on German regions to test the following: (1) these regions can be characterized by given location variables describing geographic location, firm structure, and surrounding location factors and (2) every region's locational variables affects its potential for dynamics.

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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 2094.

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Date of creation: 2007
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Handle: RePEc:ces:ceswps:_2094
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  1. Gilles Duranton & Diego Puga, 2000. "Nursery Cities: Urban diversity, process innovation, and the life-cycle of products," Working Papers dpuga-00-01, University of Toronto, Department of Economics.
  2. Audretsch, David B & Keilbach, Max, 2003. "Entrepreneurship Capital and Economic Performance," CEPR Discussion Papers 3678, C.E.P.R. Discussion Papers.
  3. Richard Florida, 2002. "Bohemia and economic geography," Journal of Economic Geography, Oxford University Press, vol. 2(1), pages 55-71, January.
  4. Gilles Duranton & Diego Puga, 2001. "From Sectoral To Functional Urban Specialisation," CEP Discussion Papers dp0511, Centre for Economic Performance, LSE.
  5. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S71-102, October.
  6. Richard Florida & Zoltan Acs & Sam Youl Lee, 2004. "Creativity and Entrepreneurship: A Regional Analysis of New Firm Formation," Papers on Entrepreneurship, Growth and Public Policy 2004-17, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
  7. Adam B. Jaffe & Manuel Trajtenberg & Rebecca Henderson, 1993. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," The Quarterly Journal of Economics, Oxford University Press, vol. 108(3), pages 577-598.
  8. Edward L. Glaeser & Jed Kolko & Albert Saiz, 2000. "Consumer City," Harvard Institute of Economic Research Working Papers 1901, Harvard - Institute of Economic Research.
  9. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-37, October.
  10. Oliver Falck & Stephan Heblich, 2007. "Modern Location Factors in Dynamic Regions," European Planning Studies, Taylor & Francis Journals, vol. 16(10), pages 1385-1403, May.
  11. Acs, Zoltán J & Audretsch, David B & Braunerhjelm, Pontus & Carlsson, Bo, 2004. "The Missing Link: The Knowledge Filter and Entrepreneurship in Endogenous Growth," CEPR Discussion Papers 4783, C.E.P.R. Discussion Papers.
  12. Fritsch, Michael, 2004. "Entrepreneurship, entry and performance of new business compared in two growth regimes: East and West Germany," Freiberg Working Papers 2004,09, TU Bergakademie Freiberg, Faculty of Economics and Business Administration.
  13. Hans-Werner Sinn, 2009. "Can Germany Be Saved?: The Malaise of the World's First Welfare State," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262512602.
  14. David B. Audretsch, 1995. "Innovation and Industry Evolution," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262011468.
  15. Bengt-ake Lundvall & Bjorn Johnson, 1994. "The Learning Economy," Industry and Innovation, Taylor & Francis Journals, vol. 1(2), pages 23-42.
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